Mapping Chicago's early-stage clean energy and sustainability startups

TechNexus is tracking early-stage energy and sustainability startups in Chicago that have raised a combined $380M in funding. From solar innovation and grid storage to carbon capture and sustainable materials, this market map covers the ventures powering the clean energy transition.

Through our Reinventing Industry series, TechNexus Venture Collaborative is actively tracking over 1,000 early-stage startups in Chicago. In this edition, we’re looking at early-stage energy and sustainability-focused startups, which have raised $380 million in cumulative funding over the course of their lifespans.

With a range of technologies represented across hardware and software products — including battery systems, novel fuel technologies, grid optimization software, carbon accounting platforms, and more — these ventures are tackling some of the biggest challenges facing the energy industry today.

Areas TechNexus is Excited About

• Battery / Energy Storage:
  • In the ever evolving race of improving the efficiency, safety, and power of battery technology, companies like Natrion and Haylon Technologies are two promising ventures in this space. With several potential corporate customers in the mobility, manufacturing, and aviation space locally headquartered, battery tech ventures are seeing significant traction across these industries.
  • Experts estimate that only 5% of all batteries that have reached the end of their commercial life have been recycled. Ventures like Renewance have emerged offering battery lifecycle & recycling solutions for industrial companies.
• Energy Marketplaces:
• A plethora of renewable energy resources now exist on the market. In order to balance supply and demand, and effectively monetize energy products across a dynamic, distributed energy grid, marketplace solutions have sprouted up. From general energy market infrastructure (ElectronX), to hydrogen procurement marketplaces (BlackCurrant), to blockchain-based legers (Innovo), local ventures are providing solutions to key areas of the energy value chain.
• Grid Management:
  • Modern grids require smarter, data-driven solutions to predict and prevent failures, especially with the complex integration of DERs (distributed energy resources). Ventures such as QiloWatt and Sigora are leveraging AI and advanced analytics to provide real-time insights like demand forecasting and pricing optimization to help utilities improve energy distribution and ensure reliable grid operations.

Key Chicago Infrastructure:

• There is no shortage of local VCs with key focus areas across sustainability and energy. TechNexus Venture Collaborative, Energize Capital, S2G Ventures, and Evergreen Climate Innovation all are active in this space.
• Catalyzed by longstanding research institutions and universities, several startups and commercialized technologies have emerged in this vertical:

(Source - World Business Chicago (Oct ‘23)

Corporate Customers

• Companies in the transportation, industrial manufacturing, or energy spaces (United Airlines, Boeing, Mack Trucks, Brunswick, JB Hunt, John Deere, ComEd) are prime candidates for sustainable fuel, grid management software, and waste management technologies
• The vast majority of public corporations in general have sustainability mandates and can benefit significantly from ESG reporting or carbon accounting software

Recent News

• Celadyne, builder of hydrogen fuel systems for heavy industries, recently entered Army SBIT Phase II in partnership with U.S. Army, focusing on creating ground vehicles that utilize less hydrogen fuel to deliver the same payload, range, and performance compared to competing solutions
• Aether Fuels, another Chicago-based venture building sustainable, cost effective liquid fuel for aviation and maritime industries, signed an MOU with airline JetBlue. This agreement creates a pathway for Aether to supply the airline with sustainable aviation fuel (SAF) when commercial production begins.
• NanoGraf awarded $60 million grant from the U.S. Department of Energy to build a batter material facility for EVs
• In Bold Print raised a $1 million seed round to help business track carbon emissions and sustainability goals
• Hydrosome Labs raised a $3.7 million seed round to enhance the bioavailability of water, as it is used for personal care, cosmetics, beverages, and agriculture purposes

Success Stories:

• Many later stage private companies serve as examples of local startups that have seen significant success. Later stage companies like sustainable materials manufacturer Natural Fiber Welding ($330 million valuation in ‘22), led by Luke Haverhals, and sustainable fuel maker LanzaJet ($30 million investment from Southwest, Airbus Group and others) led by Jimmy Samartzis are poised for continued expansion. Carbon recycling company LanzaTech, founded in 2005 by Dr. Sean Simpson and Dr. Richard Forster, ultimately IPO’d via SPAC in 2022 after raising nearly $900 million.

The big question is...which early-stage ventures are poised to grow into the next clean energy and sustainability giants in Chicago?

By Joey Alfieri at TechNexus Venture Collaborative